Russian money to boost Strabag's Polish operations

The Russia's second-richest citizen, Oleg Deripaska, will buy a 30-percent stake in Strabag SE, Austria's biggest construction company, for about R1.2 (zł.4.5) billion. The Austrian company was planning an IPO, but has postponed it until the fall. Now it plans to increase its capital by issuing 25 million new shares which will go to the Russian businessman.

Deripaska, an aluminum tycoon, is the owner of the Basic Element holding company - whose global assets amount to $23 (zł.63.8) billion, and whose consolidated revenues reached $18 (zł.49.95)  billion - as well as other assets including building and cement companies. Now, along with Strabag, which enjoys some 30 percent of the construction market in Central and Eastern Europe, Deripaska wants to make the most of the region's construction boom.

Infrastructure growth

According to Strabag, the growth of the European construction industry is being driven above all by infrastructure projects. The annual growth of the transport sector is estimated to come in at 3.5 percent for the next two years. Within the same period of time infrastructure spending in Eastern Europe is expected to grow by 11.3 percent, compared with only 2.2 percent in Western Europe.

The latest survey from the Aton Capital Group predicts that Russia will spend roughly $300 (zł.833) billion on houses, factories, roads, railways and airports. "We believe that a new era of investments in Russia is on its way. It is not a part of an election campaign or some national project. Simply, it is about time to modernize Russia," says Deripaska.

Polish program

Hans Peter Haselsteiner, president of Strabag, says that the deal will also have a positive impact for Poland. "We have the same program for Poland as we have for Russia. Poland has a big advantage because we have been there for much longer than in Russia. The only difference is the scale. Poland is a core market for Strabag and we proved that recently through the acquisition of NCC Poland," says Haselsteiner.

Strabag has concluded an agreement to buy NCC Poland from its Swedish parent NCC for R110 (zł.415) million. NCC Poland's turnover last year also reached R110 million and in 2006 the company employed 900 people. Thanks to the purchase, the Austrian company has become the biggest construction company on the Polish market. "We want to keep [this position] and defend it and contribute as much as we can to the reconstruction of Polish infrastructure," says Haselsteiner.

EU funds are one of the most important growth factors for the company. By 2013, R177 (zł.668.3) billion of EU funds will have flowed into the region. Poland has been granted R67 (zł.252.8) billion, not including the investments made before the country won the UEFA Euro 2012 bid.

"So far we have always had a lack of funds. For the coming years, with the cohesion funds and Euro 2012, financing investments will be much easier. Now we will have great chances to realize public-private partnership models," says Haselsteiner.